Sterling’s made its mind up, UK voters not quite

Sterling has appreciated 1.5% in Nominal Effective Exchange Rate terms since 26th November to a 7-month high, a notable move in a world of depressed currency volatility. Markets have seemingly taken comfort from the (modest) widening of the gap between the ruling Conservative Party and opposition Labour party in opinion polls to about 10pp and YouGov predicting that Prime Minister

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Nominal Effective Exchange Rate seasonality November & December update

This report updates the monthly seasonal patterns of 32 major Nominal Effective Exchange Rates (NEERs) going back to May 2010, using over 90,000 daily data points with trade-weights derived from the BIS (April 2019) and national central banks (see Nominal Effective Exchange Rates: Monthly seasonal patterns, 10 January 2019). A number of factors can drive currency seasonality, including underlying seasonal

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Renminbi sticking to well trodden path

We noted in “Renminbi depreciation true to form” (6 June 2019) that history was repeating itself, with the Renminbi NEER having weakened in April-June as it had done in May-July 2018, albeit at a more modest pace (see figure 1). This was a clear indication in our view that “Chinese policy-makers were once again using Renminbi depreciation as both a

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Bank of Korea’s steady hand on Won

The Korean Won Nominal Effective Exchange Rate has appreciated 4.7% since the 41-month low recorded on 12th August to a six-month high, with the Won up against the currencies of Korea’s largest trading partners, namely the Yen, Euro, Renminbi and Dollar. A common view is that, with China accounting for about a third of Korea’s total trade, day-to-day speculative flows

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The key quartet: US income, confidence, net worth and consumption

In US Consumer – From King to Prince (8 October 2019), we argued that “the recent fall in US consumer confidence, slowdown in income and wage growth and jitters in US equity markets suggest that Personal Consumption Expenditure (PCE) growth remained weak in September and thus slowed materially in Q3” (September data are due on 31st October). Weak September retail

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